The EU is making its first major move to counter spying activities conducted by American intelligence services. A new regulation aimed at restricting shady data transfers from EU states to the US is about to be voted on by the European Parliament.

The European Parliament's Committee on Civil Liberties is
expected to vote on a set of altered data protection rules on
October 21.

The new legislation would ban the transfer of European data to
third countries unless based on EU law or under a new
transatlantic pact with Americans complying with EU law.

It would also subject large US companies and social media
providers to European law, and would authorize fines for
violations – potentially running into billions of euros, the
Guardian reported.

The ban was initially proposed two years ago, but was removed
from the agenda due to heavy pressure from lobbyists in
Washington.

But the discussion has been revived following leaks by
whistleblower Edward Snowden, which revealed that American tech
giants - including Google, Facebook, Microsoft, and Yahoo - have
provided the National Security Agency (NSA) with massive amounts
of personal data belonging to European citizens.

The MPs behind the draft are calling for a new transatlantic pact
which would see the US complying with EU law in order for its
companies to have access to the European market’s 500 million
customers.

"Without any concrete agreement there would be no data
processing by telecommunications and internet companies
allowed," states the summary of the proposed data protection
rules.

The European Commission is
calling for fines of up to two percent of a company's annual
global turnover if it fails to stay in line with the new rules.
The European Parliament says the penalty should be five
percent.

The European Digital Rights (EDRi) advocacy group, which unites
35 privacy and civil rights organizations, has urged MEPs to
“vote for strong data protection rules,” stating that a
lack of strict measures “will undermine the rights and
freedoms of European citizens.”

"The choice is between clear, harmonized, predictable and
enforceable rules that will benefit European citizens and
businesses or unclear, unpredictable rules that will benefit
nobody except data monopolies and lawyers," Joe McNamee,
EDRi's executive director, said in a statement.

But despite EU Justice Commissioner Viviane Reding saying that
“there will be no legal loopholes any more” in the
proposed rules, some parliamentarians believe that US
intelligence will still be able to find ways to bypass the ban.

The new legislation has no power over European security or
national intelligence services of the 28 EU member states, which
all have their own approach to data privacy issues.

"This regulation doesn’t regulate the work of intelligence
services," German MEP Jan Philipp Albrecht said. "Of
course, national security is a huge loophole and we need to close
it. But we can't close it with this
regulation."

Besides the proposed legislation, there are currently a number of
other transatlantic arrangements which regulate Europe’s supply
of air passenger data, financial transactions, and banking
information aimed at cutting funding to terrorist organizations.
There is also the so-called ‘Safe Harbour’ accord which regulates
data exchange between US and European companies.

The EU Commission claims all of those deals will be put on hold
until the US agrees to play by the new rules. However, such harsh
measures are unlikely to be backed by national governments.

Senior officials in Brussels told the Guardian that the proposed
fines are “a joke,” and aren’t significant enough to make
the American tech giants comply with European rules.

They reminded that while breaking EU law, US-based companies
consistently argue that they are not required to abide by
European legislation. Instead, they maintain that they are only
subject to secret court orders of the US Foreign Intelligence
Surveillance Act (FISA), which facilitates the work of the NSA.

"The problem is that when these companies are faced with a
request whether to comply with EU or US law, they will usually
opt for the American law. Because in the end this is a question
of power," EU Justice Commissioner Reding said.

If the European Parliament agrees on the new rules, they will
still need to be negotiated with the European Commission and the
governments of the 28 EU member states.